I'm having trouble with my assignment. I am missing the two articles from ProQuest dat
I'm having trouble with my assignment. I am missing the two articles from ProQuest database portion of the assignment.
Listed below are the details for the assignment:
Given the market structures as described in the video, identify at least two articles from the ProQuest database that highlight and discuss two of the biggest challenges facing financial managers today in these varied market structures. In a three- to five-page paper (excluding title and reference pages), summarize your findings from the articles. Include how market liquidity, competitiveness, and efficiency impact financial managers. The paper should be formatted according to APA style as outlined in the Ashford Writing Center. Be sure to properly cite your two required articles resources using APA style.
Please add any original information/ details that you feel are important to the assignment. Attached is the first part of the assignment.
Running Head: Financial Management Challenges Challenges Facing Financial Managers in Varied Market Structures
BUS 650 Managerial Finance
Dr. Leon Daniel
January 9, 2017 Financial Management Challenges Introduction
A financial manager has the responsibility of ensuring the financial health of a firm by
analyzing data to advise leaders in the firm to make strategic decisions. With this job function,
an effective financial manager utilizes planning and forecasting to increase the firm?s
profitability (Byrd, Hickman, McPherson, 2013). Financial managers have different titles
depending on the industry in which they operate but the financial goal remains the same, which
are growth opportunities for the firm. Different market structures offer different challenges for
financial managers. The four types of market structures include perfect competition,
monopolistic competition, monopoly and oligopoly.
In a perfect competition market is when several conditions are achieved. First, buyers
and sellers are too many and too small for individual control over prices. Sellers offer no
differentiation but standardized in products; competitors can enter the market freely as well as
exit the market. According to the video, ?a perfect competition does not exist in the modern
world?. When products are the same in undifferentiated product markets, a slight reduction in
price would allow the firm to offer a better value proposition to potential buyers (Dougals,
2012). To gain a favorable market share in a perfect competition market, sellers would have to
diversify there product offerings which in turn would not be a perfect competition market
because the products offering are no longer homogeneous. Financial Management Challenges
A monopolistic competition market structure has many firms producing slightly different
products in the industry that has no barriers to entry (Byrd et al). A monopolistic competition
market occurs when a buyer places special emphasis on what they value most about the firm in
which they purchase goods. For example, lets say two coffee shops offers the same products
within a city and are in close proximity of each other. However, coffee shop A earns more money
then coffee shop B because some customers prefer the ambience at coffee shop A. Therefore,
since some customers place more value in the ambience of the coffee shop, then coffee shop A
will always sell more if that factor makes the difference. Because there are no barriers to entry,
other firms may become interested to enter the market and place a particular emphasis on what a
customer deems as valuable.
Monopolies occur when one seller of a particular product in an industry (Douglas, 2012).
Market entry in a monopoly is extremely difficult because one firm dominates the market and
can therefore control entry. Because the monopolist firm is the only firm in the market, the
market demand curve is the firm?s demand curve (Douglas, 2012). Take for instance, the
breakup of The Bell System breakup that occurred in 1984. The U.S. government bought an
antitrust lawsuit against the Bell System due to the large company monopolizing the telephone
and long distance market. This monopolization did not give customers adequate choices in
telephone services; therefore the government broke the company into smaller independent
entities. Financial Management Challenges
Since a monopoly has total control within an industry, a financial manager could face
challenges of setting prices too high for customers to purchase products. Ethical behavior can be
described as doing the right thing even when no one is watching. It would be very tempting for a
financial manager to an unethical approach to price setting because there is no competition to
make a better offer.
An oligopoly market exists when there are a few sellers in the industry, which creates
interdependence between the sellers. For instance, in the mid 1990s Microsoft and Apple
dominated the personal computer industry. When Microsoft released its Windows operating
system their value and earnings skyrocketed, whereas Apple was struggling with there Macintosh
operating system because of price and its lack of operating on any computer system like
Windows. Microsoft needed Apple to succeed in the industry because it was its nearest
competitor and if Apple did not survive Microsoft could be deemed as a monopoly. To keep
Apple thriving, Microsoft invested millions as well as signing a deal to install Windows on Apple
computers to keep the company alive.
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This question was answered on: Oct 14, 2020
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